Treasury sells off the last of its GM stock at a $10 billion taxpayer loss

posted at 7:41 pm on December 9, 2013 by Erika Johnsen

And with that, it’s “Government Motors” no more. At least, not officially.

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today.

The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout. …

GM and Chrysler both went through government-scripted Chapter 11 bankruptcy reorganizations. Treasury put $12.3 billion into Chrysler and recovered $11.13 billion of that.

The big argument by Obama officials and bailout apologists everywhere, of course, is that on net evaluation the $10 billion direct hit taxpayers are taking on this is well worth the jobs and economic infrastructure that the federal government “saved” on behalf of the Detroit auto companies, and ergo, this was a wise move and big subsequent win for the American economy.

“Inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” Treasury Secretary Jacob Lew said in a statement announcing that Treasury had sold all its remaining shares.

…But, we can never really know that, can we? Certainly the implosion of these companies would have caused a lot of very real material pain at the outset, but creative destruction and the opportunity to fail are as much a part of an economy’s long-term success as anything else. The precedent for massive corporate bailouts is now set, and General Motors is the lucky benefactor of competition deliberately denied from other companies, global and domestic, who made better business decisions and/or offered a superior product. Obama’s supporters are quick to point to “the rescue” of the U.S. auto industry as one of his greatest presidential achievements (which, to me, is an indicator of how tough it must be for them to scrape together a list of his presidential achievements, but I digress), but this entire situation is one of the many means through which President Obama has opened the door to Big Business rent-seeking and cronyism capitalism at the expense of both the Little Guy and the American economy at large.

Just how much was stolen from the bondholders? For Instance, if GM was valued at 12 Billion before bankruptcy, and the original GM bondholders got 10%, then it cost Americans another 10.8 billion that no one ever seems to account for.

GM will be back on the government teat in a few years. The systemic problems that plagued GM that resulted in the last bankruptcy will cause it again. Bankruptcy is supposed to be a chance to clean house, Obama’s intervention prevented that from happening.

GM will be back on the government teat in a few years. The systemic problems that plagued GM that resulted in the last bankruptcy will cause it again. Bankruptcy is supposed to be a chance to clean house, Obama’s intervention prevented that from happening.

TulsAmerican on December 9, 2013 at 7:59 PM

I read on IBD last month that GMAC (or whatever they call it now) is once again giving new car loans to people with credit scores below 500. Seriously, nothing good can come from that.

“The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout.”

Democrats, union bosses, relatives, and community organizers rejoice at the “spreading of the wealth.”
They seem kind of silent about where wealth comes from.
I guess it’s just “Obama Money.”
Like “Obama Phones,” the cash just appears…

The corruption in this country is beyond intolerable.
We are a banana republic on steroids.

The UAW received ~10 billion in the GM reorganization handled by the corrupt Obama administration.

5 years later, the government admits that it has ‘lost’ ~10 billion on the GM deal.

WHERE is the surprise?

Freddy on December 9, 2013 at 7:52 PM

That’s called the Ten Billion Card Monte in Gubmint parlance. The unions did go all in to help elect his Excellency so it’s only reasonable that they expect something return. Now that it paid off for them, you can bet they will be back at the trough soon enough.

I didn’t see anything in the linked article about the government sell-off.Why now? As in, why did the government sell, and take the loss, now, instead of waiting a bit longer if the trend of the stock prices were indeed improving?

What a deal. If you were a shareholder before the bailout and a tax payer afterwards, you got screwed twice by dear leader. That should make up for somehow getting him to call his signature achievement a substitute vile name. It really does put Maddof, Enron and MF Global to shame. Guess those on the left don’t mind being taken to the cleaners by a govt big enough to confiscate everything they have.